The current situation of real estate bubble in China

Here are some indicators concerning the judgment of how serious the bubble is in real estate,and compare with the actual situation of China.

Specific indicators	Bubble reference standard		China actual situation
	Light	Serious
Selling price	Price income ratio less than 6	More than 10	Approximate 8
Housing price growth rate	The value of housing price growth rate divide per capita income growth rate is more than 1	Housing price growth rate is more than 30%	The value of housing price growth rate divide per capita income growth rate is more than 1
The scope of price markup	Rising in every categories	Rising in every categories	Rising in every categories
Letting price	Real estate rent and leasing price index is less than CPI but more than 100	Real estate rent and leasing price index is less than 100	Real estate rent and leasing price index is less than CPI but more than 100
Investor motivation	Optimistic	Fully optimistic	Optimistic

Specific indicators	Bubble reference standard		China actual situation
	Light	Serious
Sales revenue growth rate	Sales revenue growth rate divide total retail sales growth rate is more than 1 but less than 2	Sales revenue growth rate divide total retail sales growth rate is more than 2	Approximately 2
Mortgage loan growth rate	Mortgage loan growth rate divide per capita income growth rate is more than 1 but less than 2	Mortgage loan growth rate divide per capita income growth rate is more than 2	Approximately 2
Deposit	Decline	Serious decline	Decline
Foreign hot money	Inflow in a large amount	Pour in rapidly	Inflow in a large amount
Private capital	Inflow in a large amount	Pour in rapidly	Inflow in a large amount

Specific indicators	Bubble reference standard		China actual situation
	Light	Serious
Purchasing house for investment	Percentage of purchasing for investment in total purchase is more than 10% but less than 20%	Percentage of purchasing for investment in total purchase is more than 20%	Percentage of purchasing for investment in total purchase is more than 10% but less than 20%
New property investment growth	New property investment growth divide GDP growth rate is more than 2 but less than 3	New property investment growth divide GDP growth rate is more than 3	New property investment growth divide GDP growth rate is more than 3
Real estate investment loan growth	Real estate investment loan growth divide total loan growth rate is more than 1 but less than 2	Real estate investment loan growth divide total loan growth rate is more than 2	Real estate investment loan growth divide total loan growth rate is more than 1 but less than 2
Housing construction growth	Housing construction growth divide sales area growth is more 1 but less than 2	Housing construction growth divide sales area growth is more 2	Housing construction growth divide sales area growth is more 1 but less than 2
Housing vacancy rate	10-20%	More than 20%	More than 20%

From the 3 diagrams above,we were able to briefly conclude that China's real estate economy is in a dangerous trend which needs to be regulated urgently.Further research will be post in next blog.